COMMENTARY: PROPOSALS FOR A NEW FISCAL FRAMEWORK

Abstract

[...]in the post-election 2015 Summer Budget, Chancellor Osborne announced a Charter for Budgetary Responsibility (HM Treasury, 2015). First of all, the political and economic cycle simply do not coincide, so tying fiscal policy to a Parliamentary term is doomed to failure. 2. [...]business cycles, like unhappy families, are each different in their own way. [...]there is no satisfactory definition of the objective of fiscal policy that meets a social welfare objective;at times, the appropriate response might mean increases or decreases in public debt as a share of national income.